Officials urge carriers to boost service to N.O.

Thursday, October 12, 2006

By Rebecca Mowbray

With Microsoft Corp. canceling meetings in New Orleans because of concerns about air service, convention and airport officials are scrambling to stave off future defections by working to increase flight service to Louis Armstrong New Orleans International Airport .

"Our goal is to add as many flights to as many destinations as we possibly can," interim Aviation Director Sean Hunter said from an aviation forecasting conference in Salt Lake City , where he's trying to drum up business. "We'll opt for air to anywhere, whether it's hubs or new cities. I'll take all the seats I can get."

Last week, Microsoft canceled three meetings in New Orleans that would have brought a combined 30,000 people to the city next year because the company felt there weren't enough flights for attendees to travel to New Orleans in a reasonable amount of time. The group was particularly concerned about international attendees.

Though Microsoft is the only group known to have canceled a post-Katrina convention because of limited air service, the move was still a blow to the New Orleans tourism industry, which says that such corporate meetings are critical as the city struggles to hang on to conventions and lure new ones. Contrary to initial reports, airport and convention officials had worked closely with the company, but they said little could be done about Microsoft's need for stronger international service. Meanwhile, some conventions with dates in New Orleans are urging their attendees to book flights early to avoid problems.

Although the airport made great strides in restoring flight service in the first months after the storm, the gains have come more slowly in the past six months. New Orleans now has about 61 percent of the seats and 65 percent of the flights it had operating before Hurricane Katrina. The airport serves about 25 percent fewer destinations than it did before the storm, increasing the chances that passengers will have to fly to a hub city such as Dallas , Houston , Memphis or Atlanta to catch a connecting flight. And planes are going out fuller than they were before the storm, making it harder -- and often more expensive -- to book a flight.

"There's just no flights," said Al Latham, a Denver real estate agent with a home in the French Quarter. Latham has traveled to New Orleans five times since Hurricane Katrina, and next month he's bringing 25 people from his office to the National Association of Realtors convention, the largest show to convene in New Orleans since the storm.

Stephen Perry, president of the New Orleans Metropolitan Convention & Visitors Bureau, said the bureau has been able to work with convention groups and airlines to make sure there's adequate air service for meetings.

"We're doing literally everything humanly possible," Perry said. "We're being more aggressive than ever."

But others say New Orleans is losing business because of its air-service challenges.

"Unfortunately, the answer to that is yes. I've talked with a number of groups that were booked or were interested in holding a meeting in New Orleans, but after checking into the (air)lift, they decided against booking into New Orleans," said Phillip Jones, president and chief executive of the Dallas Convention and Visitors Bureau and former secretary of the Department of Culture, Recreation and Tourism for Louisiana. "It's a real challenge for New Orleans .

"It's very important. I would say it's one of the top three or four issues that meeting planners must address when looking at a meeting," Jones added.

Lobbying the airlines

For two days in September, officials from the airport, convention bureau, Ernest N. Morial New Orleans Exhibition Hall Authority and Harrah's New Orleans Hotel and Casino, as well as Mayor Ray Nagin and meeting planners from Microsoft and the American College of Cardiology, met with representatives from Continental Airlines, Southwest Airlines, American Airlines and Delta Air Lines.

They took airline representatives around the city to show them that areas that draw tourists are "fresh and redone" and made their pitch for why the airlines should add flights or put larger planes on New Orleans routes.

"This was the first time we were literally able to get in the room the people who are making the scheduling for the airlines," Perry said. "They had to have a degree of comfort that what we were saying on the telephone was true."

Perry said some of the airlines were still operating with old data that painted New Orleans as it was six months after Katrina, not the way it will be in six months. The visitors bureau provided the airlines with its convention schedule so that they can plan to add service in advance of when large groups come to town.

"In doing that, we feel like we opened their eyes tremendously," Perry said. "The response was extremely positive. We had some airlines within 48 hours asking for more data."

Continental and American already have follow-up meetings scheduled with the airport, Hunter said. But he noted that it isn't easy to coax more service from the airlines. "They need to see sustained demand in the marketplace," Hunter said.

With a lower population and reduced tourism to the city, showing sustained demand is a challenge. Airlines want to see at least 90 days of sustained demand for more service before they'll consider additional flights or larger planes, Hunter said, and there's a six-month time lag before the official enplanement statistics are released through the Department of Transportation.

While airport and tourism groups lobby for long-term improvements in regular service, their short-term goal is to get airlines to build up air service for major hospitality events.

"We know that the airlines are not going to suddenly add 40 new flights in the market," Perry said. "Our goal is realistic with them. We want to make sure we have all the air lift we need for conventions, while long term we work with the city to increase it overall."

Booking flights early

Aware that flights into the city are limited, the American College of Cardiology has encouraged its members to make flight arrangements as soon as possible. The group will hold its Annual Scientific Session and i2 Summit in late March. About 30,000 people are expected to attend.

"We've basically said to people 'Book early,' " said Sue Sears Hamilton, senior director in charge of the event. "That's part of the campaign that we are pushing."

After the air service meetings last month, Continental Airlines said it would allocate larger planes to New Orleans during the association's conference, she said.

Hamilton said she's making sure that all details are properly looked after, for her convention's sake and for New Orleans .

"It's even more important now to make sure the pieces are in place," she said. "It's not only important that our meeting is effective for the College. It's as important for the city that this works, because then success will breed success. We really can't afford to fail."

The National Association of Realtors also isn't taking any chances with flights for its "NARdi Gras" meeting Nov. 10-13, which is expected to attract 25,000 to 30,000 people.

To make sure that limited flights didn't become a problem, the group scheduled several days of volunteer opportunities working with Habitat for Humanity, City Park , the St. Roch neighborhood, New Orleans Public Library and Second Harvesters food bank before and after the conference to stretch out when people would arrive.

"The volunteer days have helped to spread the arrival and departure dates," said Sue Gourley, vice president of conventions at NAR.

How well the effort works will be apparent next month.

Latham, president of Distinctive Properties Ltd. in Denver , says flights in and out of New Orleans have been a problem.

Of the 25 people Latham's office is sending to the Realtors show, about 18 of them booked tickets early, only to find that three weeks later United Airlines booted them from the flight. They're now stuck taking a 6 a.m. flight back to Denver instead of their preferred 2 p.m. option. The seven who have tried to book later are running into problems, and in some cases, they're finding that last-minute fares are running $600.

Latham thinks anyone who hoped to make last-minute travel plans might not make it to the conference.

"If they haven't made their reservations by now, it becomes a half-day journey," Latham said. "Eight hours there and eight hours back is silly for a several-day meeting."

Airline troubles

The loss of air service at Armstrong International couldn't have come at a worse time in the airline industry.

With several airlines in bankruptcy or having recently emerged from it, the industry is financially conservative. Record high jet fuel prices have made them even more cautious. With these conditions, many airlines have opted to fly fewer planes to limit their capacity and increase their profitability.

Fewer flights means increased competition among cities for service. The number of available airline seats in the United States is down 1.3 percent so far this year compared with 2005, according to the Air Transport Association, a trade group that represents airlines that provide about 90 percent of the passenger and cargo transportation in the United States .

With low-cost carriers such as Southwest, AirTran and JetBlue nipping at their heels, a number of the larger airlines have opted to pull planes from domestic routes and use them instead for international travel, according to the Air Transport Association. Carriers can make more money on the international flights, because they have fewer competitors and because long-haul flights require less fuel than the frequent takeoffs and landings on domestic flights. Seating capacity on international flights is up 4.7 percent, said John Heimlich, chief economist for the ATA.

"Internationally, you don't have to compete with the car or the train or, for that matter, as many airlines as you do domestically," Heimlich said. "Economically, it's been much healthier. That's the No. 1 factor."

Essentially, the air-service problem is not a New Orleans problem; it's a national issue made more challenging by Katrina.

"We had our own Katrina up here in Atlanta called bankruptcy. We adjusted our capacity," said Bob Cortelyou, vice president for network planning at Atlanta-based Delta Air Lines, which is now focusing more on international travel. "Delta is not as large in New Orleans . Well, we're not as large as we were in other cities. It's not just a New Orleans phenomenon."

Delta held its North American sales meeting in New Orleans last month so 250 sales agents could check out the city while Cortelyou had dinner with Perry. Delta is trying to upgrade 50-seat and 70-seat regional jets to 142-seat planes in New Orleans when it can, and will introduce a direct flight to Los Angeles from New Orleans in February.

"We're starting to release our capacity to add more service back into New Orleans ," Cortelyou said.

After the storm, Southwest, New Orleans ' largest carrier, quickly reassigned planes to other cities, such as Southwest's new hub in Denver .

"We continue to look at New Orleans and closely monitor the demand for the service we have," Whitney Eichinger, a spokeswoman for the airline. "We have known that there has been a desire to have more flights in New Orleans , and we feel that we have been adding flights as quickly as we can."

Southwest Airlines plans to add two nonstop services, one to Dallas and another to Tampa, on Oct. 29, giving the carrier 26 daily nonstop departures to 10 cities from New Orleans. That's down from 57 daily nonstop flights to 16 cities before Katrina. Eichinger said the airline will continue to monitor demand here, but she added that Southwest also is responding to growth in other markets, including two of its newest, Washington , D.C., and Denver .

American Airlines has 16 daily departures from Louis Armstrong International, the same number as it did before Katrina, but about 50 fewer seats.

"For us to be holding the line in a market that has actually gotten smaller since the hurricane should show our commitment to New Orleans ," company spokesman Tim Wagner said. "We've done our best to help New Orleans out."

Like American, Continental has been working closely with the convention bureau to schedule extra flights or put larger planes on the routes when conventions or special events need it.

Karen Zachary, managing director of scheduling planning at the Houston-based airline, said Continental is doing it because it makes financial sense. "It's actually very good business," Zachary said.

She said she is impressed with the city's progress, but decisions on deploying aircraft examine the demand for service, revenue that flights are generating and what the airline would give up by reassigning a plane from one place to another.

"Our take on it is that it's seeing steady growth. It may be not as fast as New Orleans would like, but the enplanements continue to climb," she said. "It's now behaving like a growing market."

'Large construction boom'

Hunter is confident that the airport will have more flight service than it did before Hurricane Katrina by the beginning of 2008.

"Oh, absolutely. It's my expectation that they will exceed pre-Katrina levels in the next 18 months," Hunter said.

That's because with the recovery, New Orleans now has more business travelers in the mix. When the city's many new temporary residents fly back to their regular offices or home to visit their families, they're purchasing higher-priced tickets closer to the dates they plan to travel than leisure tourists.

"I think it's something we can build upon. We will see a large construction boom in there for a long, long time," Hunter said.

The experience of Gulfport-Biloxi International Airport supports Hunter's belief.

The Mississippi Gulf Coast , which was able to begin its construction boom more quickly than in New Orleans because the storm surge gave the area a blank slate for rebuilding, has more demand for flights than it did before the storm.

Business travel for construction and the return of the casinos helped Gulfport-Biloxi International gain flights after Katrina.

"We're actually ahead of the game," said Don Shepley, director of operations and maintenance at the airport. "We have about 17 percent more seats available than pre-Katrina, and an additional two flights a day. We're heading in a great direction."

While flight service in New Orleans strengthens, Hunter and Perry are laying plans for improving the quality of the airport itself.

The airport will present a master plan to the New Orleans Aviation Board this month. The airport also is working on an operational audit to find ways to run the airport more efficiently and a ground transportation audit to find ways to improve taxi, limousine and shuttle service for passengers.

In addition, the visitors bureau is spearheading an effort to improve the look and feel of the airport. A coalition of various members of the hospitality industry -- including Hunter of the airport; Warren Reuther Jr., president of the Ernest N. Morial Convention Center Board; and Ti Martin of Commander's Palace -- is investigating ways to make the aging airport more attractive.

"It's an older airport. It's got some problems," Perry said. "Their initial focus will be to delve into what it takes to make the airport look like and be positioned as one of the most attractive small airports in the United States ."

The group is planning to turn in a report to Lt. Gov. Mitch Landrieu's office in two weeks.

"These things will help our facilities better serve our customer, and it will give the entire region a better look. We're the first thing you see when you arrive and the last thing you see when you leave," Hunter said.

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Rebecca Mowbray can be reached at rmowbray@timespicayune.com or (504) 826-3417. Jaquetta White can be reached at jwhite@timespicayune.com or (504) 826-3494.